What Filesharing Studies Really Say – Part 14 – File-Sharing Litigation Never Worked In Asia Either

In the previous study we covered here on ZeroPaid, we saw an interesting point that lowering prices is, perhaps, the best way to attract customers as noted in Korea. That study wasn’t the only one conducted in that region. In this study, there is a the familiar argument that file-sharing lawsuits don’t really work. This time, the focus is on Korea and Japan.

We’ve now arrived at the home stretch of our series – now having reviewed three quarters of the studies we were able to retrieve from scholarly sources and it has been quite a journey.

The study for today bears the title “A Legal and Cultural Comparison of File-Sharing Disputes in Japan and the Republic of Korea and Implications for Future Cyber-Regulation”. This study was published in 2008 by the Colombian Journal of Asian Law.

The study begins with a review of what some of the legal actions major entertainment corporations have taken. Some of the actions include the lawsuit against File Rogue, the conviction of the programmer of file-sharing software Winny, the legal action against providers of Soribada (referred to, in this study, as the Korean equivalent of Napster) and the litigation of a number of file-sharers as well.

What was interesting at the beginning of this rather lengthy study was some of the legal changes of copyright law and their impact on file-sharing:

Notably, it has been legal provisions generally disfavored by the entertainment industry, such as permitting CD rentals, and not stronger punitive measures against file-sharers, that have lessened the impact of file-sharing on Japanese copyright owners. For Korea, where file-sharing has been and remains common and economically significant, a broader
consideration of the cultural environment is necessary. While cultural issues are at play in explaining the consistent pervasiveness of filesharing even in the face of criminal sanctions, the operative factors are not traditional Confuicianist notions, as are often invoked to explain social attitudes in East Asia.”

To my knowledge, I think that when it comes to stopping file-sharing, I’m not convinced the idea of renting music CD’s entered the minds of many people in North America. Even if the idea of renting out CDs was floated, I’m not aware of it being used as a deterrent to file-sharing – unless of course I’ve missed something somewhere along the line. I suppose, in spirit, North America and Europe have a similar idea with music streaming sites. Overall, an interesting connection that didn’t necessarily enter my mind before.

The study then covers some background in copyright law in Japan starting with the Meiji Restoration of 1868. Further down, it also reviewed the 1869 Publishing Ordinance, the introduction in 1875 of a “monopoly right” (which is a 30 year copyright term), and the amendment of the Copyright Act in 1899 to list a few examples of a rather lengthy historical review. What is also noticeable was that copyright laws, according to the study, wasn’t really stringently enforced until the 1950’s and 1960’s which is after World War II. Copyright law was extended to 50 years in 1971.

Korea had a similarly extensive review of it’s copyright legal past as well.

What may be of interest for those who are more followers of copyright then file-sharing might be the following comment in this study:

Japan has no statutory provisions on indirect copyright infringement. Under Japanese law, only direct infringement can form the basis for injunctive relief

What is also of interest is copyright exceptions as it relates to file-sharing:

The Japanese Act contains a broad private use copying exemption, but this exemption has not been interpreted to apply to filesharers, at least not to file-sharers who upload works. While downloading a copy of a work for private use would likely fall under the
exemption, downloading to a shared folder would permit other users of the particular file-sharing software to copy and thus constitute infringement.

While this can change at any time, Canada sort of operates in a similar fashion that uploading isn’t necessarily illegal, but the act of downloading is considered by a number of law experts to fall in to a legal grey zone and is interpreted as legal for now. Of course, enforcing copyright laws on downloaders has been pretty absent in the world of copyright litigation. Most, if not, all, file-sharing lawsuits to my knowledge have been directed at uploaders. So, while laws vary, the actual practice of copyright enforcement has generally been directed at uploaders and website operators in a number of countries to my knowledge.

What is quite interesting is the comments of Korean file-sharers:

Civil suits against individual users of file-sharing software are legally available where infringements occur, but no such suits have yet been attempted. Criminal prosecutions may also be taken against direct copyright infringers. Thus far, approximately 30 Koreans have been prosecuted for infringements resulting from file-sharing (including both uploading and downloading).

This, I have to admit, is the first time I’ve heard of file-sharers getting targeted for the act of downloading which probably speaks to the rarity of such a thing of ever happening. Still, it’s not entirely clear from this excerpt if any of those 30 individuals were prosecuted for the mere act of downloading and not uploading. If any of them did get prosecuted solely for downloading, then it’s the first I’ve heard of anyone ever getting prosecuted for downloading.

The study then goes on to discuss the architecture of file-sharing in File Rogue and Soribada. It also mentions that eDonkey and Pruna were also popular in Korea. The study also discusses various legal actions and the development of p2p over time since File Rogue. One note of interest is that “To date, there have been no civil lawsuits brought against
individual file-sharers in Japan”. It noted that, generally, commercial copyright piracy is what gets prosecuted in Japan and that there were 13,000 complaints issued against alleged infringers, but the Prosecutors Office said that they’d only go after commercial infringers.

The study further comments that file-sharing attitudes are, well, not too dissimilar to that of North American file-sharers in roughly the same time period – that many of them didn’t really see much harm in the activity.

What is also an interesting similarity is that while there was a noted decline in physical music sales around the same time period file-sharing was widely available, “there is not a
clearly documented causal relationship between file-sharing activities and a decrease in music sales. Amongst other alternative explanations, some of the CD sales have likely been replaced by other legal means of obtaining music, such as fee-based downloading.” This is even though the major record industry insists that file-sharing is killing the music business.

Moreover, the following portion seems to agree with the previous study about how price could be the best weapon against file-sharing:

For consumers in nations without available music rentals, filesharing presented an opportunity to obtain music without paying the price of a CD. CDs cost the equivalent of at least US$30 in Japan, while Korean CDs are priced in a range similar to CDs in the U.S.’ When asked, Korean file-sharers frequently cite the price of music CDs as a motivation for file-sharing.’

This seems quite consistent with previous studies on why file-sharers tend to download from unauthorized sources. The thing about all of this is that there are two factors working against younger people when it comes to buying music – higher tuition fees and lower wages. This is especially true today when it seems that tuition fees are sky-high and the only direction they are going is even higher. Meanwhile, younger people are continually being expected to work for less. In some places, it is legal for the youngest of the population to be paid below minimum wage in a traditional work place. When you factor in the expectation of the cost of maintaining a car (with gas prices headed in the same direction as tuition fees), rent (which is sky-high in places like Toronto, Edmonton and Vancouver to name a few places) and owning a cell phone (with data plans that have been known to be about as asinine as tuition fees at times), how much money does that leave for buying music in the first place? When people are expected to work for less and pay more for the same services they want, something is going to give sooner or later.

Skimming ahead a little, there was this other interesting note about the philosophy of Confucius as it relates to file-sharing and music:

Many in academia, journalism, and government have suggested that the nature of the tension between Korean society and its current copyright law is fundamentally philosophical. They argue that Koreans traditionally regarded artistic works as public goods, not private property, and the creation of such artistic works need not be incentivized through an American-style copyright regime. ‘ Traditional Confucian ideals that elevate scholarship above the level of mere economic transaction and emphasize collective social benefit may help to explain a cultural nonacceptance of western copyright doctrine. ‘ Though the Korean Government has gone to some lengths, at the behest of the U.S., to educate Koreans on the new copyright regime,'” it seems that familiarity with Western copyright principles has not led to those principles being widely embraced in Korea.’

I think it’s not just Confucius philosophy that leads to skepticism about American style copyright law. In a number of countries, there is skepticism about American style copyright laws. for a whole host of reasons. One of the biggest reasons why people in some countries are skeptical about American style copyright law is that it’s being forced into the country through heavy-handed techniques. One excellent example is through trade agreements like ACTA and the TPP. Both have had a long history of being negotiated in private, then, at the end of the day, numerous countries are being expected to just implement laws recommended in these agreements. This completely circumvents basic democratic principles of laws being debated publicly before passing them in the first place. It’s like a secret government is dictating what laws should and shouldn’t be passed on other countries. It can easily be seen as an infringement on the basic principle of sovereignty. Sovereignty was another underlying current in the original raiding of ThePiratBay. American officials basically told Swedish officials to seize the servers of the BitTorrent website in a manner that contradicted Swedish law. I think the idea of America putting its nose in another countries business and doing what it pleases in another country has a tendency to fuel skepticism towards American style copyright when it’s also being pushed onto people in Sweden. There was also the great push to put a three-strikes law in New Zealand which fueled debate on why America was writing New Zealand law. I really could go on and on why there is skepticism of American-style copyright laws.

Another interesting note:

Of the Korean students surveyed, almost all file-shared copyrighted works, and few considered it to be wrongful. However, many stated they thought it was wrong to purchase pirated physical copies, and they said they would not purchase such copies even though
they were not deterred from doing so by fear of punishment.

I think something like this is also seemingly universally shared thinking. I think it’s easy to start traveling over moral boundaries when we start talking about buying bootlegged content. When it’s non-commercial, it isn’t seen such a bad thing compared to buying bootlegged material for a large segment of the global population. To me, if you’re willing to pay money to buy music, buy it from an authorized source for crying out loud.

In an interesting twist, the study then talks about how file-sharing is seen as a way for Korean’s to express their views and freely access legally posted material online. The study cited a few Korean’s in a survey saying that they use file-sharing to access freely posted materials which also includes open source content. While the study discussed, at length, how news not covered by traditional media is posted online, the study made an interesting connection between the two:

Has this discussion gone too far afield of the subject of filesharing regulations? The connections between file-sharing and internet political activities are indirect and often speculative. However, if a society sees file-sharing regulation in the context of socially and politically relevant internet freedoms, it is likely to take a less restrictive approach to regulation than a society that does not. There are plausible reasons to think that Korea is more the former, and Japan more the latter.

Towards the end of the study, there is this comment:

In both Japan and Korea, as in many other nations, increasing attention is being devoted to the possibility of finding private industry solutions to problems that traditional copyright law has been unable to fully control. In general, the Korean music industry has been very aggressive about adopting fee-based internet downloads as a new channel of distribution, and the industry can be expected to continue to innovate in the face of widespread file-sharing amongst young Koreans. Other major industries based around works that are easily file-shared, such as the movie industry, can also be expected to explore new means of marketing and distributing products. In Japan, the music industry has been relatively slow to adjust to internet-based business models, but it has the luxury of slow adaptation because profits have remained relatively stable in recent years. I have argued that Japanese profit margins have in part been preserved by pre-existing legislative bargains by which the Japanese state has balanced economic interests with the desire of the public to utilize new technologies. This fundamentally different approach, driven by public discourse and compromise, will likely remain an essential component to Japanese regulation in the future.

The comparison is quite interesting. As profits slid in Korea, the music industry began to adapt. Meanwhile, in Japan, profits have been stable, so the industry felt no real need to adapt quite as quickly to technology. In North America, as profits slid, there was an increase in efforts to not adapt to technology for the music industry. So, in the US, the opposite was seemingly strangely true. I don’t know about everyone else, but the context of the music industries reaction to file-sharing in both Korea and Japan and then adding the context of the music industry in North America makes the North American music industry rather strange.

Since this article is long enough, we’ll skip to the conclusion of this study:

This article has shown that legal enforcement, whether criminal prosecution or civil suits, is unlikely to curb file-sharing and protect traditional content-based business models in Japan and Korea. In the Japanese case, relatively low rates of file-sharing stem from legislative compromises that, intentionally or not, have mitigated the incentives for users to file-share and the impact of file-sharing on industry revenues. In particular, the music rental industry altered the relationship between filesharing and industry economics and has blunted the impact of filesharing.

[…]

In Korea, file-sharing has remained widespread in spite of legal action taken against both service providers and individual users. With no immediate punitive threat present against noncommercial file-sharers, there is little reason to expect file-sharing to become less prominent. The high frequency of Korean infringement of copyrights online may result in part from Korea’s historical experience with copyright law, as well as the particular value of a free internet to Korean social expression and political activities and identity. Forced to react to unfavorable business circumstances, the Korean music industry has adapted by rapidly
expanding legal online distribution of copyrighted content. Inasmuch as file-sharing continues despite convenient and economical legal alternatives, however, the Korean music industry may have to adjust to significantly reduced revenue streams or to consider more drastic business reforms to induce voluntary consumer participation in industry business models. One already lucrative market segment that could be expanded is easy and rapid distribution to mobile devices.

One theme that stuck out for me was the idea of adapting business models to technology. Another theme was the fact that litigation and enforcement never really worked to stem file-sharing. Overall, I found this study to be informative given that it’s often difficult to know what is happening in places like Japan and South Korea with respect to file-sharing.

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Drew Wilson
Drew Wilson is perhaps one of the more well-known file-sharing and technology news writers around. A journalist in the field since 2005, his work has had semi-regular appearances on social news websites and even occasional appearances on major news outlets as well. Drew founded freezenet.ca and still contributes to ZeroPaid. Twitter | Google Plus